The Scrutiny Continues: California Sues Amazon!

October 12, 2022

Amazon is a giant – there’s no doubt about that. According to a recent AP News article, “Amazon controls roughly 38% of online sales in the U.S., more than Walmart, eBay, Apple, Best Buy and Target combined, according to the research firm Insider Intelligence. About 2 million sellers list their products on Amazon’s third-party marketplace, accounting for 58% of the company’s retail sales.”

Amazon continues to face scrutiny and numerous lawsuits. In a recent article, we pointed out that the company was investigated in both the US and EU for giving an advantage in search engine results to their own private-label products. Now in California, Amazon is again facing a lawsuit brought by the State of California that accuses the company of preventing competition by penalizing sellers and suppliers offering cheaper prices elsewhere.

** **

California sues Amazon, alleging its policies cause higher prices everywhere

By Alina Selyukh and Raquel Maria Dillon

 

California sued Amazon on Wednesday, accusing the company of pushing sellers and suppliers into anticompetitive deals that lead to higher prices, including at rival online stores.

The lawsuit, filed by state Attorney General Rob Bonta, focuses on the way Amazon — the largest online retailer — deals with third-party merchants, who account for most of the sales on the platform.

California alleges that Amazon penalizes sellers and suppliers that offer cheaper prices elsewhere on the internet, including Walmart and Target, for example by displaying their items lower or less prominently or outright blocking their new postings.

“Amazon makes consumers think they are getting the lowest prices possible,” the lawsuit alleges, “when in fact, they cannot get the low prices that would prevail in a freely competitive market because Amazon has coerced and induced its third-party sellers and wholesale suppliers to enter into anticompetitive agreements on price.”

California’s antitrust lawsuit is among the biggest legal challenges to Amazon in recent years, as lawmakers and regulators in the U.S. and abroad have investigated the retail giant for potential anticompetitive practices.

Read the full article HERE.

Photo Credit: Marques Thomas